Putting bread on the table is easier for some Americans than others.
More than three quarters of U.S. adults (78%) have little to no room to stretch their budget to cope with with rising inflation, according to a recent Forbes Advisor survey of 2,000 people. The reason? Most of their income is being spent on food and housing.
To make matters worse, 40% of those surveyed said they were relying on credit cards more often as a result of inflation, which has hit a 40-year high. Another 27% of those polled said they were hitting their spending limit, while 25% said that they have little space left in their budget.
There has been some relief for workers, however. On July 1, three states, 16 cities and counties, and the District of Columbia all raised their minimum wages. Non-tipped workers in Washington, D.C., for instance, started making an hourly wage of $16.10.
Connecticut residents who previously made the minimum wage of $13 an hour will now earn $14 an hour. Oregon workers saw their minimum wage go up to $13.50 an hour. In Nevada, wages increased to $10.50 for workers without health benefits and $9.50 for workers with benefits.
“At a time when families are coping with rising prices, these increases will help many low-wage workers and their families make ends meet,” Sebastian Martinez Hickey and David Cooper, researchers with the Economic Policy Institute, a progressive think tank, said.
The researchers, in a working paper released Monday, wrote, “Laws that automatically raise the minimum wage with inflation each year ensure that minimum wage workers’ paychecks can still buy at least the same amount of goods and services year after year.”
“‘Laws that automatically raise the minimum wage with inflation each year ensure that minimum wage workers’ paychecks can still buy at least the same amount of goods and services year after year.’”
But inflation is more avoidable for some Americans than others. To some extent, it may depend on where you live. Being wealthy in America is relative. In California, it means being a millionaire. In the south, it could mean less than $1 million.
To join the 1% in America, you need at least $4.4 million, according to data released last year from property agency Knight Frank. But the amount of money it takes to be among the richest in each state varies wildly. For instance, it takes $4.2 million for to be in the top 1% in New York, the survey found.
In California, the magic number is $6.8 million, and it’s $6.9 million in Hawaii, making them the most difficult states to enter the top 1%. But to be counted among the 1% in Mississippi, it takes just $766,000.
Mississippi also has the lowest personal income per capita among all states, at $44,796 a year, according to the Bureau of Economic Analysis. Mississippi has a minimum wage of $7.25 per hour, the same as the federal minimum wage, which hasn’t changed since 2009.
California, meanwhile, has one of the highest personal incomes per capita: $77,211 a year in 2022. But even California, which benefits from high earners in Silicon Valley, ranked behind Washington, D.C. ($98,317 a year), as well as Massachusetts and Connecticut.
Nationwide, it takes at least $774,000 for the average American to feel financially comfortable, according to Charles Schwab
and $2.2 million to see themselves as wealthy. Yet the average American household only has a net worth of around $168,000, the Federal Reserve said.
Although many billionaires have flocked to Hawaii in recent years, California still has the city with the highest share of superrich — San Jose, according to a separate report by the data and intelligence firm Wealth-X.
Wealth inequality in the U.S. has intensified. The top 1% of the country contributed to around a quarter of the total wealth in the early 1990s. That rose to roughly one-third in the first quarter of 2022, according to the Federal Reserve.
(Emma Ockerman contributed to this report.)